Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Mar 8, 2022

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Key Takeaways

  • Car insurance companies will not offer coverage without receiving payment first
  • No-deposit car insurance — also known as zero-down car insurance — does not exist and refers to dispersing the cost of the deposit throughout the policy
  • The best way to get cheap car insurance is through liability-only coverage, which only covers damage to other cars in situations you are at fault

How can I get cheap car insurance? We hear that question a lot, but the answer is often surprising. If you’re looking to save money on your car insurance, you should consider reducing your coverage, researching discounts with insurance companies, and browsing various companies for the best possible rate.

Cheap car insurance with no deposit can be challenging to find because no-deposit car insurance does not exist. However, many companies offer a car insurance policy in which the first monthly payment is smaller, while the following months may yield larger payments. The first payment is smaller because the deposit is dispersed across the policy term.

Additionally, many companies offer competitive pricing for liability-only coverage packages. Liability-only coverage will require money to start a policy, but it can be relatively inexpensive compared to other car insurance companies.

Very cheap car insurance with no deposit is not possible, though browsing for the right choice can help.

Use your ZIP code in our free car insurance comparison tool to see which car insurance companies fit your needs.

What is no-deposit car insurance?

No-deposit and zero-down car insurance are not legitimate policies offered by any company. There are no car insurance companies with a buy now pay later policy. However, many companies offer a reduced cost to start coverage with larger monthly payments after the first month.

If you are looking for cheaper options, you may find liability-only coverage helpful because it is generally less expensive. The average car insurance down payment is between 8% and 30% of the policy’s annual premium. The low cost of liability-only coverage will make a deposit small and manageable.

Alternatively, companies may use a dispersed payment system to minimize costs for consumers. Companies use the phrase “no down payment” to indicate that you will only pay for the first month of the policy to begin coverage. Usually, the first month of a car insurance policy is more expensive because of the deposit.

Though your first month’s payment may be smaller without a deposit, you will encounter higher charges in the next several months. Not every car insurance provider will offer no-deposit coverage, and it may only be available in some states like Arizona, New York, or Georgia.

Monthly payments for typical car insurance coverage cost slightly more throughout the policy, with policies typically lasting six months to a year. However, if a policyholder chooses to pay the deposit in a lump sum, they will pay a slightly smaller price.

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The Cheapest Car Insurance Rates are for Liability-Only Coverage

Instant auto insurance with no down payment is not feasible, but choosing liability-only coverage can provide you with inexpensive coverage. There may still be a down payment for liability-only coverage, but the down payment may not cost a lot. A $20 down payment for car insurance may be enough.

Liability-only coverage is a basic insurance package that covers any damage your vehicle causes to other property if you are declared at fault in an auto accident. Liability-only coverage will also cover expenses like medical bills, prescriptions, and costs associated with pain.

However, liability-only coverage will not cover damage to your car. If you’re at fault, you must repair your vehicle out-of-pocket.

Keep reading to learn more about car insurance companies with the most competitive and inexpensive rates for liability-only coverage.


GEICO no down payment insurance is not available, but GEICO does offer the lowest monthly cost for liability-only coverage at about $55 per month. This cost is inexpensive compared to other insurance companies that charge an average yearly rate exceeding $1,000.

GEICO also has discounts for bundling that may apply to liability-only coverage. In most states, liability coverage is required, and GEICO has the most competitive prices on the market.


At around $80 per month, Travelers has a relatively inexpensive liability-only coverage policy that protects you from legal fees and bodily injury. It can also payout to assist in repairing other vehicles.


Another inexpensive option for liability-only car insurance is Nationwide. This car insurance company offers liability-only coverage for around $65 per month.


For roughly $85 per month, you can buy car insurance with Farmers. The policy totals up to $1,020 per year, making it one of the cheapest packages on the market.

State Farm

Alongside GEICO, State Farm is one of the cheapest car insurance companies. For less than $70 per month, you can get liability-only coverage. This price may not be the cheapest, but it costs less than $1,000 annually.


For around $75 per month, Allstate offers liability-only coverage that can protect you in the event of an at-fault accident where you must payout. Yearly, Allstate liability-only coverage will cost around $900.


Progressive is a big name in car insurance known for its affordable pricing. You can add liability-only insurance to your vehicle for around $75 a month.


Among the big names in car insurance, the most expensive is MetLife’s 12-month policy for liability-only coverage, which exceeds $1,100. For around $95 a month, you can get this coverage with MetLife, but it will cost more in the long run than using one of their cheaper counterparts.

What is the best car insurance for full coverage?

It may not be a surprise that GEICO is the cheapest car insurance company that offers full comprehensive coverage. Comprehensive and collision coverage through GEICO costs around $1,100 annually, making it the least expensive with the most value.

GEICO also has options and discounts for bundling their services, offering a roadside assistance package for around $14 a year. The package includes towing, tire changes, and fuel delivery. The free GEICO mobile app is simple and the best method for requesting roadside assistance.

While GEICO is the cheapest car insurance for comprehensive and collision coverage, it may not suit the needs of all drivers. Competitors to GEICO offer discounts and rates that may be more beneficial for specific situations and drivers. For example, USAA is a military-based banking company that offers home, auto, and pet insurance for military members and dependents. The discounted rate for military members may give drivers more coverage for their price and steep discounts on bundling services.

Several competitors offer similar pricings as GEICO. State Farm, Nationwide, Progressive, and Allstate have a similar annual cost for comprehensive and collision coverage.

Liability-Only Coverage Is a Great Choice for Dirt Cheap Car Insurance

While there are no car insurance companies that offer no-deposit car insurance, some may give you a smaller first-month payment in exchange for larger monthly payments in the later months. However, the best way to get dirt cheap car insurance is to stick with one of the many car insurance companies that offer liability-only coverage for competitive pricing.

With options like GEICO, Allstate, and Progressive, you may find affordable coverage that fits your needs without a costly deposit. It may seem confusing and irritating, but picking the right coverage and car insurance does not have to cost thousands of dollars a year.

To view all your available options, enter your ZIP code in our free car insurance comparison tool to see estimates that offer you the best deal for your needs.